Alyansa Para Sa Bagong Pilipinas v. Energy Regulatory Commission
REITERATIONFacts
The Antecedents: On June 11, 2015, the Department of Energy (DOE) issued Circular No. DC2015-06-0008, mandating that all Distribution Utilities (DUs) must secure their Power Supply Agreements (PSAs) through a Competitive Selection Process (CSP), a form of public bidding. This was to ensure transparency and the least-cost supply of electricity to consumers, in line with the policies of the Electric Power Industry Reform Act (EPIRA). The circular took effect on June 30, 2015. Procedural History: On October 20, 2015, the Energy Regulatory Commission (ERC) issued Resolution No. 13, Series of 2015 (CSP Guidelines), which set a new effectivity date for the CSP requirement to November 7, 2015, effectively postponing the DOE's mandate. On March 15, 2016, the ERC issued another resolution, Resolution No. 1, Series of 2016 (ERC Clarificatory Resolution), which again postponed the CSP effectivity to April 30, 2016. This second postponement triggered a rush of filings, with Meralco and other DUs submitting at least 90 PSAs for approval without undergoing CSP. These PSAs had long-term contracts of 20 to 21 years. The Petition: Alyansa para sa Bagong Pilipinas, Inc. (ABP) filed a petition for certiorari and prohibition with the Supreme Court, assailing the ERC Clarificatory Resolution. ABP argued that the ERC committed grave abuse of discretion by unilaterally postponing the CSP mandate. It sought to have the resolution declared void and to compel the ERC to disapprove the PSAs filed after the original effectivity date for non-compliance with the CSP.
Issue(s)
Whether the ERC committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the ERC Clarificatory Resolution which postponed the effectivity of the mandatory Competitive Selection Process (CSP). Whether the Power Supply Agreements (PSAs) submitted to the ERC on or after June 30, 2015, must comply with the CSP requirement.
Ruling
The petition is GRANTED. The first paragraph of Section 4 of Energy Regulatory Commission Resolution No. 13, Series of 2015, and Energy Regulatory Commission Resolution No. 1, Series of 2016, are declared VOID ab initio. Consequently, all Power Supply Agreement applications submitted by Distribution Utilities to the Energy Regulatory Commission on or after 30 June 2015 shall comply with the Competitive Selection Process in accordance with Department of Energy Circular No. DC2018-02-0003.
Ratio Decidendi
On Issue 1: Yes, the ERC committed grave abuse of discretion. The Supreme Court held that under the Electric Power Industry Reform Act (EPIRA), the DOE is the policy-making body, while the ERC's primary function is to enforce the rules and regulations issued by the DOE. The 2015 DOE Circular, which mandated the CSP effective June 30, 2015, has the force and effect of law and cannot be unilaterally altered by the ERC. The ERC's power to issue 'supplemental guidelines' does not include the power to amend or postpone the effectivity of the primary regulation. The two postponements, totaling 305 days, were made without coordination with the DOE and constituted an ultra vires act. This action was a patent and gross abuse of discretion as it subverted a crucial public interest policy and allowed DUs to lock in long-term contracts for at least 20 years without transparent, competitive bidding. On Issue 2: Yes, all PSAs submitted on or after June 30, 2015, must comply with the CSP. Since the ERC's resolutions postponing the CSP were declared void ab initio, the original effectivity date of June 30, 2015, as mandated by the 2015 DOE Circular, is upheld. Therefore, all 90 PSA applications submitted to the ERC after this date are invalid for purposes of passing on costs to consumers until they comply with the CSP requirement. The Court directed that these PSAs must undergo the CSP in accordance with the latest relevant regulation, DOE Circular No. DC2018-02-0003. The power purchase cost resulting from such compliance shall retroact to the date of effectivity of the complying PSA, but not earlier than June 30, 2015.
Main Doctrine
The Energy Regulatory Commission (ERC), as an implementing and enforcement body, does not possess the statutory authority to unilaterally amend, postpone, or revoke the rules and regulations issued by the Department of Energy (DOE), the primary policy-making agency under the Electric Power Industry Reform Act (EPIRA). DOE circulars issued pursuant to its rule-making power have the force and effect of law. The ERC's unilateral postponement of the mandatory Competitive Selection Process (CSP) for Power Supply Agreements, which subverted the state policy of ensuring transparent and least-cost electricity for the public, constitutes grave abuse of discretion amounting to lack or excess of jurisdiction.